mooves

Do we need them?

There has long been concern that the process of buying a house in England is complicated, long-winded and expensive. The current process has seen the ugly head of gazumping become a common feature in the market. If, as intended, the process is speeded up by the introduction of seller's packs, it is believed that the window of opportunity for gazumping will be closed down to a minimal level. The inclusion of a survey should also minimise the occurrences of mis-selling, where sellers attempt to cover up major structural damage to a property. Sounds perfect.

However, it is not quite as simple as all that. A survey will be an integral feature of the pack. Yet only one in five buyers actually commission a full survey. And while the seller accepts this cost, many buyers who would not normally request a survey will actually bear the cost, as they themselves will be selling a property for which they have to pay for a pack to be completed. In effect the cost of purchasing a property is being increased. Not a situation welcomed by many. Except of course by the surveyors, who will clearly benefit from all of the extra work being pushed their way.

It is also widely accepted that many sellers speculatively put a property on the market to test the water, yet do often end up selling for the right offer. Speculative sellers are likely to be put off by the �800 cost of obtaining a sellers pack. Would this reduce supply, thereby increasing competition and driving up prices? Only time will tell.

And will buyers believe a survey provided and paid for by a seller? How does the buyer know that the surveyor is offering a fair and unbiased view and not simply sales patter? If a seller disagrees or is simply unhappy with the negative results of the first survey, what is stopping them simply covering up the damage reported and arranging for a new inspection by a different surveyor.

What happens if the house does not sell? Will the survey still be valid after say nine months? Or will the seller have to bear the cost of a new survey at regular intervals? The problems mount.

The effect of seller's packs on small and independent estate agents could be devastating. While the bank-owned and insurance backed agencies will be able to cover the costs of surveys and offer the packs for free, this will simply not be viable for many.

The consumers will no doubt be more than ready to take up the offer of free packs starving many agencies of vital customers and eventually forcing them out of business. Mr Kent commented, "If we charge a �500 fee without a sale we are never going to get any business. It will make it very difficult for us - I have had hundreds of letters supporting me and I just think the Government has got it wrong".

The eventual number of casualties could be as high as 7,500 agencies as potential sellers think long and hard about putting a property on the market and forking out �800 or simply choosing the bank-backed agencies. And although the cost reduction of using a larger agency seems attractive, "Customers will be losing the opportunity to have independent advice and they will be tied in to the lawyer, the money-lender and the surveyor who are all being employed by the larger building societies."

A side effect of the seller's pack will be the massive increase in demand for surveys. The UK is currently experiencing a significant shortage of qualified surveyors, a situation likely to worsen as seller's packs are introduced

While the Institute for Chartered Surveyors recently announced plans to recruit around 5,000 new employees, the capacity for the industry to undertake extra work until they are fully trained is obviously limited. Quite how the Institute plans to achieve these employment targets and how long it will take are also questionable issues.

It seems likely that the introduction of the sellers pack may well even slow down the purchase process, defeating entirely their purpose.

[Previous Page] [Next Page]